“This is a global fund; social media is expanding rapidly around the world, even though people often consider social media a U.S. phenomenon,” the CEO of Global X told Benzinga. “China has 50% more internet users than the U.S., despite only having an internet penetration rate of around 37% compared to the U.S.’s 78%. This is part of the reason that China is represented significantly in the Fund, combined with the fact that the major U.S. social media companies are still private. This ETF is specifically designed to capture the global aspect of social media, which is often overlooked but clearly should not be ignored.”
After plunging almost 15% on Monday, the newly minted Groupon shares continued to fall Tuesday, declining 10.7% at last check and dipping dangerously close to their original $20 IPO price as LivingSocial, Groupon’s main competitor, announced deals for Black Friday shopping.
“Groupon is not doing much for Back Friday, so LivingSocial may take customer attention and business away from Groupon,” Edward Woo, an analyst at Wedbush Securities, said in a Reuters report.
Because it invests in recent IPOs, investors should expect volatility in the social media ETF.
For more information on the tech sector, visit our technology category.
Max Chen contributed to this article.